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of <h1>Appeal Success: CENVAT Credit Rule 14 Applied to SEZ Supplies</h1> The appellant appealed against the rejection of their appeal by the Commissioner (A) regarding the clearance of excisable goods to SEZ Developers without ... CENVAT credit - separate accounts for exempted as well as taxable goods - Natural justice - Held that: - the issue involved in the present case is no more res integra and has been settled in favor of the appellant by the decision in the case of Sujana Metal Products Vs. CCE [2011 (9) TMI 724 - CESTAT, BANGALORE], wherein the Division Bench has come to the conclusion that supplies made to SEZ from DTA are deemed exports and assessee is entitled to the benefit of CENVAT credit and is not required to maintain separate account for dutiable and non-dutiable goods - appeal allowed - decided in favor of appellant. Issues:- Appeal against rejection of appeal by Commissioner (A) upholding Order-in-Original regarding clearance of excisable goods to SEZ Developers without payment of duty- Applicability of Rule 19 of Central Excise Rules, 2002 and Rule 14 of CENVAT Credit Rules, 2004- Requirement of maintaining separate account for exempted goods- Demand of Central Excise duty, interest, and penaltyAnalysis:The appeal was directed against the rejection of the appellant's appeal by the Commissioner (A) who upheld the Order-in-Original related to the clearance of excisable goods to SEZ Developers without payment of duty. The appellants, engaged in manufacturing cable trays and raceways, were found to have cleared goods without duty payment during November 2006 to December 2008. The issue revolved around the demand of Central Excise duty amounting to Rs. 36,17,641, equivalent to 10% of the total price of exempted clearances, under Rule 14 of CENVAT Credit Rules, 2004. The appellants were also liable for interest and penalty as per the provisions of the rules. The Order-in-Original confirmed Central Excise duty involved in clearances to SEZ developers, leading to the filing of the present appeal.Upon hearing both parties and examining the records, it was noted that the appellant did not appear, while the learned AR represented the respondent. The key issue in the case was whether supplies made to SEZ from DTA are deemed exports, entitling the assessee to the benefit of CENVAT credit without the necessity of maintaining a separate account for dutiable and non-dutiable goods. The decision of the Division Bench in the case of Sujana Metal Products Vs. CCE: 2011 (273) ELT 112 was cited, where it was established that such supplies are deemed exports, allowing the assessee to avail CENVAT credit without separate accounts. By following this precedent, the impugned order was deemed unsustainable in law, leading to the setting aside of the order and allowing the appeal of the appellant with any consequential relief.In conclusion, the judgment favored the appellant by applying the precedent that supplies to SEZ from DTA are deemed exports, entitling the appellant to CENVAT credit without the obligation of maintaining separate accounts for dutiable and non-dutiable goods. The impugned order was set aside, granting relief to the appellant in the case.
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